Thursday, 21 October 2010

The government's 'progressive' changes: the judgement

The Institute for Fiscal Studies are the experts' experts. Everyone respects their abilities. Is the new regime 'fair' or 'progressive'? They think not:

The cuts to welfare spending mean that benefits will be focussed more on pensioners and less on families with children. The radical reform to council tax benefit is probably the one that raises the most concerns ... The Treasury's modelling shows that the benefit measures announced yesterday will hit those in the bottom half of the income distribution more as a share of their income than those in the top half. We agree with this assessment. The Treasury also claimed that overall the tax and benefit measures yet to be implemented are progressive ... But this analysis excludes some measures that we think it is possible to make a rough estimate for.

Our analysis – published in August – shows that by including a wider set of benefit reforms announced by this government leads to the conclusion that the impact of all tax and benefit measures yet to come in reduces the incomes of lower income households by more than that of higher income households, with the notable exception of the richest 2% of the population who are the hardest hit. Therefore the tax and benefit changes are regressive rather than progressive across most of the income distribution. And when we add in the new measures announced yesterday this finding is, unsurprisingly, reinforced.

Who votes Tory? Not the poor, but an awful lot of pensioners who hanker for the days of school flogging, hanging, fighting the Germans, spitting at black people and that nice Mr Macmillan.

OK, I'm being mean - but pensioners are the Tories' core vote. So bollocks to the rest of us.